UPDATE 4-Amazon leaps into home entertainment fray with $99 Fire TV

(Adds analysts' comments on gaming and FireTV, graphics)

By Jennifer Saba and Deepa Seetharaman

NEW YORK/SAN FRANCISCO, April 2 Amazon.com Inc
made a play for the increasingly crowded home
entertainment arena by unveiling the $99 "Fire TV" video and
game streaming device on Wednesday, with hopes of boosting its
main online retail business over the longer term.

The square device, which just about fits in the palm of one
hand, streams content from Netflix Inc, Hulu and other
video services - much like Apple TV or Google Inc's
Chromecast.

It also offers a prominent platform for Amazon's own
fast-growing streaming video service as well as its growing
slate of original television programs and games. Amazon will
also sell a separate controller for gaming that costs $39.99.

Amazon, which has been building its multimedia presence to
tap the growing appetite for digital media, is now jumping
headlong into the heated competition for consumers' attention
and an estimated $70 billion TV ad market. It took the wraps off
the Fire TV at a rare Apple-style media event in New York.

Analysts were split on Amazon's prospects. Some said its
strategy to pitch the Fire TV as an option for casual gamers
would set the box apart. Others were disappointed Amazon did not
undercut its rivals' prices in keeping with its pricing strategy
on the original Kindle Fire tablet.

"They created a product we didn't need," said Wedbush
analyst Michael Pachter.

The Fire TV competes in a market that is set to grow by 24
percent this year, Strategy Analytics said. But that's off a low
base: streaming boxes have still not made much of a splash,
partly because game consoles from Microsoft, Sony and
Nintendo -- not to mention "smart" TVs and DVD players --
already stream Netflix and other popular services.

Tech leaders from Microsoft Corp to Apple Inc are
vying for space on the TV, the traditional family entertainment
center and where Americans used to spend most of their leisure
time. That has changed with the advent of the smartphone and
tablet.

The device is one of several initiatives by Amazon, one of
the world's largest online retailers, to play a central role in
how consumers shop and spend their leisure time. Its projects
range from building more warehouses to expand its same-day
delivery service to developing original television shows such as
the political comedy "Alpha House" starring John Goodman.

If Fire TV takes off, it could help shape the way consumers
shop online. Fire TV viewers may eventually be able to use their
remote to buy a product directly off a commercial, analysts
said, as Amazon's multimedia and online retail businesses become
even more integrated.

"The company will eventually want to help you buy things in
the living room," Forrester Research analyst James McQuivey
said. "Only Amazon can piece that entire experience together in
the living room and though we don't see evidence of that
ambition here today, we should assume Amazon knows this and is
planning on it."

While the company tried to one-up existing streaming boxes
with voice-activation and a line-up of games from publishers
like Electronic Arts and Walt Disney Co, some
remained doubtful the Fire TV will make waves upon debut.

JOHNNY COME LATELY

Amazon's biggest previous foray into tech hardware -- the
Kindle e-reader -- succeeded because it was an early entrant in
a nascent market. But the Fire TV is a latecomer to two markets
that rivals had fought over for years -- gaming and home
entertainment.

Amazon has to wedge itself into a market split fairly evenly
between various nascent technologies, all of which are
challenging cable companies' traditional death-grip on TV
viewing.

But the company promised however that Fire TV, available now
on Amazon.com, would be faster and easier to use than Apple TV,
Google's Chromecast or Roku Inc's streaming video device.

It can predict what the user will watch and cue it up,
Kindle unit vice president Peter Larsen said. It also has a
feature that uses data from IMDB to identify the music on screen
as well as the actors and their filmography as they exit and
enter the screen on TV.

"When we look at the living room, how do we make the
complexity disappear?" Larsen said at a rare, Apple-style New
York product launch event.

Fire TV's remote features a microphone that enables
voice-activated search. Fire TV is integrated with Hulu Plus so
users can see Amazon shows from their Hulu account, and Amazon
said it may bring in other partners soon.

By next month, Fire TV users will be able to play thousands
of video games. Amazon decided to develop the device after
reading customer complaints on its website about lagging
performance, cumbersome search and closed "ecosystems" on rival
set-top boxes.

Shares in Amazon ended down 0.3 percent at $341.96 on
Nasdaq.
(Additional reporting by Liana Baker in New York, Editing by
Richard Chang, Edwin Chan and Andrew Hay)

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